The Scottish Tourism Alliance is one of four leading sectoral industry groups – representing tourism, retail, commercial property and manufacturing – to unite to challenge the Scottish Government to ensure future increases in business rates rise by no more than CPI, rather than the RPI measure of inflation.
A switch from RPI to CPI indexation was endorsed by the recent Barclay Rates Review and – following the recent UK Budget – is also being introduced for ratepayers in England from next spring.
Scotland has historically maintained a level playing field with England on the headline business rate poundage. Keeping future rises in Scottish business rates aligned with RPI rather than CPI would therefore put Scottish businesses at a competitive disadvantage compared to firms operating down south by approximately £25-30 million next year.
In Scotland, firms operating from medium-sized and larger premises already pay more than they would in similar premises in England to the tune of £62 million each year, due to last year’s doubling of the Large Business Rates Supplement.
The Scottish Tourism Alliance, Scottish Engineering, Scottish Property Federation and the Scottish Retail Consortium have now joined forcers to speak up in advance of the Scottish Government’s Budget which is expected on December 14.
Marc Crothall, chief executive of the Scottish Tourism Alliance of which the SLTA is a member, said: “The Scottish Tourism Alliance fully supports calls for increases in the business rates poundage in Scotland to be linked to the CPI from April, following the Chancellor’s announcement that firms south of the Border will benefit from the lower level of calculation.
“We acknowledge the Scottish Government’s pledge to continue the capping of rateable increases for many tourism firms. However, there is still widespread serious concern within the industry around the future cost of business rates despite the short-term comfort of the interim cap afforded to some.
“Indeed business rates remained the number one issue of concern in the STA’s recent research into future confidence within the industry. It is vital that Scotland offers a business environment which is as competitive if not more so than what our industry counterparts enjoy south of the Border.”
The Scottish Property Federation’s director, David Melhuish, said that the Scottish Budget offered the Government an opportunity to set a sustainable path to supporting business and taking forward the Barclay Review of business rates.
David Lonsdale, director of the Scottish Retail Consortium, added: “Scottish ministers have said they want to pursue the most competitive business rates regime in the UK, and implementing Barclay’s recommendations on tying uplifts in business rates to CPI rather than RPI would help towards achieving that goal of competitiveness.
“Such a move would make retailers more confident about investing in new or refurbished shop premises to the benefit of customers and our town centres.”